UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

INVESTMENT ADVISERS ACT OF 1940
Release No. 2289 / August 30, 2004

INVESTMENT COMPANY ACT OF 1940
Release No. 26589 / August 30, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11619

In the Matter of

TIMOTHY J. MILLER,

Respondent.

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ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER PURSUANT TO SECTIONS 203(f) AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940 AND SECTIONS 9(b) AND 9(f) OF THE INVESTMENT COMPANY ACT OF 1940

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 203(f) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") and Sections 9(b) and 9(f) of the Investment Company Act of 1940 ("Investment Company Act") against Timothy J. Miller ("Respondent" or "Miller").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(f) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940 ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds1 that:

Overview

A. This is a proceeding against Timothy J. Miller, a former employee of Invesco Funds Group, Inc. ("IFG"), a registered investment adviser to the Invesco mutual fund complex (the "Invesco Funds" or "Funds"), based on his role in assisting IFG in approving market timing agreements from 2001 through July 2003 (the "relevant time period"). By entering into these agreements IFG breached its fiduciary duty to the Funds. The agreements also contravened the Funds' prospectus disclosures.

B. Market timing includes (a) frequent buying and selling of shares of the same mutual fund or (b) buying or selling mutual fund shares in order to exploit inefficiencies in mutual fund pricing. Market timing, while not illegal perse, can harm other mutual fund shareholders because it can dilute the value of their shares, if the market timer is exploiting pricing inefficiencies, or disrupt the management of the mutual fund's investment portfolio and can cause the targeted mutual fund to incur costs borne by other shareholders to accommodate frequent buying and selling of shares by the market timer.

C. Under the market timing agreements, IFG, through Miller and others, permitted certain select investors ("Market Timers") to make excessive exchanges and redemptionstotaling approximately $58 billion in select Invesco Funds. IFG required, either expressly or tacitly, the Market Timers' investment of "sticky assets" in Invesco Funds (i.e., long-term money that would remain in a particular fund without being actively traded) under some of the agreements.

D. The market timing agreements financially benefited IFG in that IFG realized additional advisory fees from the timed Funds and sticky assets under its management. Because IFG had reason to believe that the assets brought to the Funds under the market timing agreements, while serving to increase IFG's advisory fees, could be traded in a manner detrimental to the Funds, IFG had a conflict of interest with the Funds. IFG failed to disclose the conflict of interest to the board of directors of the Funds or to the Fund shareholdersand obtain the board members' consent to the agreements, thereby breaching IFG's fiduciary duty to the Funds.

E. The market timing agreements were also inconsistent with the disclosures made in the Funds' prospectuses. The prospectuses stated that shareholders could make up to four exchanges out of each Fund per twelve-month period. The market timing agreements provided for more than the disclosed number of exchanges. Furthermore, while the prospectuses also disclosed that each Fund reserved the right to modify the exchange policy if such a modification was determined to be in the best interests of the Fund, IFG failed to make a determination that each proposed market timing agreement was in the best interest of the Fund before entering into the agreement. In the aggregate, the market timing trades made under the agreements were detrimental to the Funds' shareholders for the reasons set forth in paragraph B above.

Respondent

F. Miller served as the chief investment officer ("CIO") of IFG from July 2000 until May 2004. In that position, he supervised the portfolio managers for the Invesco Funds. From 1993 through 2004, Miller also was the primary portfolio manager for the Invesco Dynamics Fund ("Dynamics Fund"), one of the Funds that was most heavily timed by the Market Timers, and in which he had invested a substantial amount of his personal savings. He also served as a co-manager for other Invesco Funds. Before joining IFG, Miller worked for approximately 13 years in research, analyst, and investment management positions. Miller, age 46, is a resident of Englewood, Colorado.

Other Related Entities

G. IFG, a Delaware corporation with headquarters in Denver, Colorado, and its predecessors have been registered with the Commission as an investment adviser since 1957. Since February of 1997, IFG has been a wholly-owned subsidiary of AMVESCAP PLC, a public company headquartered in London, England. During the relevant time period, IFG served as an investment adviser to eight registered open-ended investment companies, consisting of over forty-five series (each of which is functionally a separate investment company). On December 2, 2003, the Commission filed an action against IFG and its former chief executive officer in federal district court in connection with the matters described herein. SEC v. IFG et al., Civil Action No. 03-N-2421 (PAC).

Facts

Miller's Knowledge of, and Role in Approving or Rejecting, Agreements with Market Timers

H. During the relevant time period, Miller was the CIO of IFG and the primary portfolio manager of the Dynamics Fund. As CIO, in addition to supervising IFG's portfolio managers, Miller held positions on IFG's Executive Committee, which met on a weekly basis to discuss company-wide issues; on the Risk Management Committee, which considered the impact of potential compliance problems; and on the Portfolio Review Committee, which Miller instituted for purposes of reviewing each Fund on a quarterly basis to discuss performance-related issues with the relevant portfolio managers and IFG management. During this period, Miller also made presentations to the Funds' board of directors relating to performance of the Funds' portfolios. In addition, as the portfolio manager of the Dynamics Fund and as the CIO of IFG, Miller read and was familiar with the Funds' exchange policy, and received draft prospectuses for the Dynamics Fund for his review and comment before they were published.

I. In his role as CIO, Miller was given responsibility for approving the agreements that IFG entered into with Market Timers. To obtain Miller's approval of a market timing agreement, the head of IFG's "market timing desk" would orally present a proposed market timing agreement to Miller, explaining to Miller the market timer's proposed frequent trading model. Miller then approved or rejected the proposed agreement. In doing so, Miller would typically consider, among other things, whether the Fund or Funds had sufficient assets under management to accommodate the proposed amount of timing money without disrupting management of the Fund or Funds. Though Miller was authorized to unilaterally reject market timing proposals, and did reject proposals, he approved at least thirty of them.

J. Miller also knew that with most Market Timers, IFG required that they keep their timed monies within the Invesco fund complex when exchanging out of a Fund approved for timing. With some Market Timers, Miller also knew that they agreed to maintain sticky assets within the Invesco fund complex.

K. Miller knew, or was reckless in not knowing, that the assets brought to the Funds under the market timing agreements, while serving to increase IFG's advisory fees, could be traded in a manner detrimental to the Funds. This placed IFG in a conflict of interest situation with the Funds that was not disclosed to the Funds' board of directors or shareholdersand through which IFG breached its fiduciary duty to the Funds. Furthermore, Miller was reckless in not disclosing the existence of the market timing agreements to the Funds' board of directors though he personally made presentations to the board where market timing was discussed, or in pursuing the question of whether other IFG management who reported to the Funds' board of directors had made such a disclosure.

The Funds' Prospectuses Prohibited Market Timing and Frequent Trading in Invesco's Mutual Funds at the Same Time IFG Allowed Investors to Market Time the Funds

L. During the same period that IFG entered into agreements with Market Timers, the prospectuses for the Funds represented that IFG discouraged frequent trading by investors by attempting to limit the number of exchanges a shareholder could make in each Fund. To that end, these prospectuses disclosed that shareholders could "make up to four exchanges out of each Fund per twelve-month period." The prospectuses further disclosed that "[e]ach Fund reserves the right to reject any exchange request, or to modify or terminate the exchange policy, if it is in the best interests of the Fund."

M. Throughout the relevant time period, IFG provided these prospectuses to shareholders and prospective shareholders in the Funds. IFG also included the prospectuses in registration statements for the Funds filed with the Commission.

N. Miller knew, or was reckless in not knowing, that IFG's agreements with Market Timers were inconsistent with the Funds' prospectus disclosure. Because he was familiar with each Market Timer's frequent trading model, he knew that the Market Timers were being allowed to make more than four exchanges out of certain Funds in a twelve month period. Miller also knew, or was reckless in not knowing, that IFG failed to make a determination that each proposed market timing agreement was in the best interest of the Fund before entering into the agreement, at least in part because he himself did not make such a determination before approving a market timing agreement.

O. Although he did not sign the registration statements IFG filed on behalf of the Funds with the Commission, Miller should have corrected the prospectus disclosure for the Dynamics Fund but failed to do so.

Violations

P. As a result of the above-described conduct, Miller:

1. willfully aided and abetted and caused IFG's violations of Section 206(1) and (2) of the Advisers Act, and

2. caused IFG's violation of Section 34(b) of the Investment Company Act due to an act or omission that Miller knew or should have known would contribute to such violation.

Undertakings

Q. Respondent undertakes to cooperate fully with the Commission in any and all investigations, litigations or other proceedings brought by the Commission relating to or arising from the matters described in the Order, and agrees:

1. To comply with any and all reasonable requests by the Commission's staff for documents or other information;

2. To be interviewed at such times as the Commission's staff reasonably may direct;

3. To appear and testify in such investigations, depositions, hearings or trials as the Commission's staff reasonably may direct; and

4. That in connection with any (i) testimony of Respondent to be conducted by testimony session, deposition, hearing or trial, or (ii) requests for documents or other information, that any notice or subpoena for such may be addressed to Respondent's counsel, and be served by mail or facsimile.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Miller's Offer.

Accordingly, it is hereby ORDERED:

A. Pursuant to Section 203(k) of the Advisers Act and Section 9(f) of the Investment Company Act, that Respondent Miller cease and desist from committing or causing any violations and any future violations of Sections 206(1) and 206(2) of the Advisers Act and Section 34(b) of the Investment Company Act.

B. Pursuant to Section 203(f) of the Advisers Act and Section 9(b) of the Investment Company Act, that Respondent Miller be, and hereby is, barred from association with any investment adviser, and is prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter, with a right to reapply for association after one (1) year from the date of the Order to the appropriate self-regulatory organization, or if there is none, to the Commission. Any reapplication for association by Miller will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against Miller, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

C. For three years from the date of the Order, Miller shall not serve as a chairman, director, or officer of any investment adviser, or as an officer or director of any registered investment company.

D. Miller shall, upon entry of the Order, pay a civil penalty in the amount of $150,000 and disgorgement in the amount of $1 to the United States Treasury. Such payment shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 22312; and (D) submitted under cover letter that identifies Timothy J. Miller as a Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Randall J. Fons, Regional Director, Securities and Exchange Commission, 1801 California Street, Suite 1500, Denver, Colorado, 80202. Such civil money penalty may be distributed pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 ("Fair Fund distribution"). Regardless of whether any such Fair Fund distribution is made, amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated as penalties paid to the government for all purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, Respondent agrees that he shall not, in any Related Investor Action, benefit from any offset or reduction of any investor's claim by the amount of any Fair Fund distribution to such investor in this proceeding that is proportionately attributable to the civil penalty paid by Respondent ("Penalty Offset"). If the court in any Related Investor Action grants such an offset or reduction, Respondent agrees that he shall, within 30 days after entry of a final order granting the offset or reduction, notify the Commission's counsel in this action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not be deemed an additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed against Respondent in this proceeding. For purposes of this paragraph, a "Related Investor Action" means a private damages action brought against Respondent by or on behalf of one or more investors based on substantially the same facts as alleged in the Order in this proceeding.

By the Commission.

Jonathan G. Katz
Secretary

1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.